The Growing Role of PLM in Compliance Management

How do you react when compliance management standards change, virtually overnight?

Unfortunately, the need for swift reaction and adherence  is a reality today for apparel makers. Recent tragedies in overseas factories have forced manufacturers into a new age of compliance responsiveness. Today's brand owners need to monitor for fabric and construction quality, chemical use, wages, child labor, and now, building standards. Doing the right thing has never been more challenging.

As compliance management becomes a bigger, more encompassing, critical concern for apparel makers, advanced product lifecycle management (PLM) software is stepping up to help companies manage routine compliance requirements, react almost instantly to swiftly changing standards and requirements, and make better long-term sourcing decisions.

Providing a "single version of the truth" about products, PLM can also provide a full picture of supplier activity. That picture can include historic and recent compliance performance, and a link to vendor scorecards. Tracking and monitoring can extend to virtually all areas of compliance,  and include essentially all forms of documentation: written, oral, photographic, and even GPS-location stamping for authentication. With the improved visibility into compliance performance that PLM provides, brand owners can rapidly respond to changing needs, dramatically reduce supply disruptions and mitigate risk.

Mobile apps and compliance
Integrate the immediacy and ease-of-use of mobile apps with PLM, and its value to compliance management skyrockets. No longer a novelty or just for convenience, mobile apps are playing a significant role in helping manufacturers adapt to changing requirements for compliance management – literally overnight. Factory audit mobile apps let users define audit templates to meet shifting or new obligations. Auditors can capture compliance findings on the spot as they conduct assessments, and document specific compliance issues.

Photo and audio apps let auditors record comments instantly with a mobile device’s microphone. Auditors can capture and store photos containing audit results using the device's camera. Mobile device touch screens can capture required signatures. Audit data can be "tagged" with GPS location data to verify the audit location. All audit data links directly to the PLM software for instant review by all members of the product team, or for review with external auditors. If factory auditors are working at remote sites without Internet connectivity, smart apps store findings on the mobile device. When connectivity is available, findings upload to the PLM software.

By directly linking the "here and now" of global manufacturing conditions to vendor scorecards, PLM factory audit mobile apps help companies track and compare supplier performance and the global audit process. Auditors and factory managers can review and monitor progress and performance. Suppliers can see actionable items that will improve ratings. Management can use the information in supplier negotiations and sourcing decisions for collections in development. Add the capability to rapidly and easily develop audit templates to address new compliance challenges as they arise, and brand owners suddenly gain the ability to be more proactive in their compliance management programs.

The ability to rapidly develop new audit templates to address ever-changing regulatory and compliance needs creates clear advantages for apparel makers. They can easily plan for new or changing compliance requirements, audit and document findings, integrate those findings with vendor scorecards, and gain instant visibility into compliance status.

Taking the steps to ensure visibility into compliance status while staying on top of shifting requirements communicates important messages for shareholders and stakeholders as well. Companies can maintain key relationships with buyers and other partners. They can avoid potential litigation and claims by other countries' governments, factories and employees. And they can send the right message to consumers, who increasingly view adherence to compliance standards as part of a company's social responsibility, and who increasingly incorporate such adherence into their buying decisions. Companies that can respond quickly, and set in place solid tracking and monitoring to help assure compliance will help to enhance the brand's image and reputation.

Conversely, those that cannot face often-irreparable damage and economic loss. Knowing which suppliers cannot meet compliance requirements, combined with the ability to respond quickly to changing compliance standards, can significantly reduce a public company's market risk. History shows that major apparel companies have lost hundreds of millions of dollars in market value after news of failing to adhere to or even know about key compliance standards.

Doing the right thing
Most importantly, a well-designed, responsive compliance management program enables brand owners to do the right thing, creating winning outcomes for all parties, from suppliers to consumers, and from employees to shareholders. By engendering visibility and responsiveness, PLM software is a critical tool  that helps to create and sustain such a program.

Apparel brand owners working to do the right thing in their factories, offices and supplier locations around the world must respond to changing compliance regulations at lightning speed, collect information at the drop of a hat, and ensure that decision-makers have immediate visibility into compliance status at all times. Those prepared with integrated PLM solutions and the right mobile apps will be able to stay abreast.

James Horne is vice president of marketing for Centric Software, Inc., a PLM software provider.
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